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Eastern May Sell Assets, Entire Company

Eastern May Sell Assets, Entire Company

Eastern Enterprises stock price jumped more than 13% last week to more than $44/share on news it is evaluating strategic alternatives that could include share repurchases, joint ventures or a sale of all or part of the company.

Eastern said it has retained Salomon Smith Barney to assist its board and management in the review. The process will include an assessment of its current strategy of consolidating New England gas distribution utilities following regulatory approval of its mergers with Colonial Gas and EnergyNorth, which are expected by next month and next summer, respectively. The two LDC additions come on the heels of Eastern's purchase of Essex Gas late last year. Combined with subsidiary Boston Gas, the purchases will make the company the largest gas distributor in New England, serving more than 800,000 customers throughout Massachusetts and New Hampshire.

"As a result of the dramatic changes taking place within the utility industry, Eastern's board of trustees and management believe now is a prudent time to undertake a review of all of Eastern's options," said CEO J. Atwood Ives.

Eastern also owns and operates Cincinnati-based Midland Enterprises, a leading carrier of coal and a major carrier of other dry bulk cargoes on the nation's inland waterways, and ServicEdge, which is the largest unregulated provider of residential HVAC equipment installation and service to customers in Massachusetts.

The company reported a net loss of $2.6 million ($0.11/share) during the second quarter, compared with net income of $52.3 million ($2.30/share).

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